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19 March 2020

MTN pushes for Iran growth amid Covid-19 concerns, sanctions

The Johannesburg-based company allows the Iranian unit to convert earnings into loans from MTN rather than send them to the parent company

The carrier is considering selling down stakes in telecommunications-tower group IHS Holdings/Bloomberg

by Bloomberg

MTN Group said that its Iranian business is still able to achieve strong sales growth in the short term, even as the unit battles to overcome ongoing US sanctions and the rapid spread of the coronavirus.

Ralph Mupita, MTN’s Chief Financial Officer, said that Africa’s largest wireless carrier is finding it tough to take money out of its second-biggest market by subscribers due to measures re-imposed by US President Donald Trump.

“This has placed MTN Irancell in a position where it has enough cash to continue funding its network expansion, even during these tough times,” added Mupita.

Mupita said that MTN has seven reported cases of employees testing positive for Covid-19. Iran has suffered the third-biggest hit in the world from the pandemic, with more than 16,000 people infected.

MTN’s main operations across sub-Saharan Africa have been less directly affected by the virus, but the associated effect on the region’s economy and market turmoil have hammered the company’s share price.

Adverse trading conditions may impact MTN’s plans to sell assets and raise as much as ZAR 60 billion ($3.5 billion) to reduce debt, said Mupita. The carrier is considering selling down stakes in telecommunications-tower group IHS Holdings and its Lagos-listed Nigerian business while mulling further disposals.

“We have managed to reduce debt to the lowest in four years but would like to push that even lower in the medium term and to do this, we will have to wait for more favourable market conditions,” added Mupita.







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